Fifteenth Finance Commission Current Affairs - 2020

Fifteenth Finance Commission to assess impacts of COVID-19

The Economic Advisory Council of the Fifteenth Finance Commission is to meet on April 23 and 24, 2020. The council is to discuss the impacts of COVID-19.

Highlights

A two-day meeting is to be held through video conference. The experts will discuss about macro variables over time. The agenda of the meet also includes public expenditure to be spent to improve the economy. The council will also discuss about assisting research study that will enhance understanding of the issue.

Significance

The international financial institutions have decreased the growth rate of India. The IMF (International Monetary Fund) has estimated growth rate of India to be 1.9% in 2020-21. The World Bank has estimated the growth rate of the country as 1.5% to 2.8%. The Fitch rating has cut India’s Growth rate to 2% and the S&P pegs the country’s growth rate at 2%. The Moody’s have estimated at 2.5%. The estimated growth rates have been the lowest in 30 years.

Chief Economic Advisor Krishnamurthy Subramanian appointed as Advisory Council Member in 15th Finance Commission

The Chief Economic Advisor (CEA) to Central government, Dr. Krishnamurthy Subramanian is appointed as twelfth (12) member of Advisory Council of Fifteenth (15th) Finance Commission (FCc).

Advisory Council

It now has 12 members, which include noted economists Surjit Bhalla, Arvind Virmani, Indira Rajaraman and M Govinda Rao among others.

Role and Function:

  • To is to advise FC on any relevant matter or subject related to Terms of Reference (ToR) of Commission.
  • To assists FC in preparing any research paper or study which would enhance commission’s understanding on issue contained in its ToR.
  • To help expand FC understanding in adopting best national and international practices on matters of fiscal devolution and
  • To help improve quality, reach and enforcement of FC recommendations.

Finance Commission

  • It is constituted under article 280 of Constitution by President of India. It mainly gives its recommendations on tax devolution i.e. distribution of tax revenues between Union and States and amongst states themselves.
  • It is appointed for a period of five years and comprise of five member including one chairman and four other members.
  • First FC was constituted under chairmanship of Shri K.C. Neogy on 6th April, 1952.

Fifteenth Finance Commission

  • It was constituted in November 2017, to give recommendations for tax devolution and other fiscal matter for five fiscal years, 1 April 2020- 31 March 2025.
  • It is chaired by N. K. Singh, and members Ajay Narayan Jha, Ashok Lahiri and Anoop Singh. Ramesh Chand is a part-time member in FC.